Walgreens Boots Alliance will invest $ 5.5 billion in two companies as part of the pharmacy chain’s ongoing effort to diversify its healthcare operations, the company announced Thursday.
Walgreens is investing $ 5.2 billion at VillageMD, a primary care startup he invested in $ 1 billion last year. So Walgreens wants invest $ 300 million at home health benefits management company CareCentrix.
“The best healthcare is deeply rooted in local communities, and Walgreens is committed to expanding convenient access to high-quality, affordable healthcare services for our patients and customers at our neighborhood locations,” said Roz Brewer, CEO Walgreens Boots Alliance, in a Press release.
Walgreens is now the majority owner of both companies. The company’s pharmacy stake in VilliageMD increased from 30% to 63%, and the company now controls 55% of CareCentrix. Both companies will remain independent. VillageMD plans to go public next year. Walgreens has the option to acquire the remaining capital of CareCentrix in the future.
Walgreens has already opened 52 primary care clinics with VillageMD and plans to have more than 80 sites operating by the end of the year. In total, Walgreens and VillageMD aim to open at least 1,000 clinics within Walgreens stores by 2027.
Walgreens’ main competitor, CVS Health, has also been expanding its presence in primary care, opening new HealthHubs in its stores.
CareCentrix works with health systems and health plans to coordinate products and services for post-acute care in the home. The company offers transitional care, home nursing, home infusion, and home palliative care for 19 million patients.
The investment advances Walgreens forays into the post-acute care and home care segments and supports Walgreens Health, a new division that brings together the company’s pharmacy, primary care, post-acute care and virtual care services.
“To support the launch of Walgreens Health, we continue to make strategic investments in healthcare and pharmaceutical solutions that can improve care coordination and health outcomes while reducing overall costs,” said Brewer. “The CareCentrix suite of home care solutions will enhance our capabilities in this important segment.”
Walgreens generated $ 34.3 billion in revenue, up 12.8%, for the fourth quarter of its fiscal year 2021, which ended August 31, the company reported Thursday. Health and wellness sales increased 14%, partly driven by COVID-19 home tests, vitamins, and cough, cold and flu products. The company’s operating income increased 49.7% to $ 910 million for the quarter.
Walgreens expects to complete its investment in VillageMD by the end of the year and its investment in CareCentrix in early 2022.